Euro Area Economic Outlook
Economic growth should accelerate in 2027, after hitting a three-year low in 2026. Stronger growth in fixed investment, driven by German fiscal stimulus, will be the main driver. That said, the bloc’s economy will still trail the major economies’ average in 2027 due to comparatively softer consumption growth.
Euro Area Inflation
Harmonized inflation rose to 3.8% in September from 3.2% in August, moving further above the ECB’s 2.0% target, driven by surging energy prices amid renewed U.S.-Iran hostilities. Still, average inflation should pull back from 2026’s three-year high in 2027 as energy prices gradually decline, but will remain north of the ECB’s 2.0% inflation target until 2028.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Current Account Balance (% of GDP) | 2.7 | -0.2 | 1.7 | 2.5 | 1.7 |
| Merchandise Trade Balance (USD bn) | 335 | -62 | 271 | 354 | 371 |
| Merchandise Exports (USD bn) | 2,872 | 3,025 | 3,058 | 3,050 | 3,244 |
| Merchandise Imports (USD bn) | 2,537 | 3,087 | 2,788 | 2,696 | 2,873 |
| GDP per Capita (USD) | 42,670 | 41,230 | 44,958 | 46,695 | 50,359 |
| Economic Growth (Real GDP, ann. var. %) | 6.4 | 3.7 | 0.6 | 1.2 | 1.3 |
| Fixed Investment (ann. var. %) | 3.6 | 2.6 | 2.8 | -1.8 | 3.0 |
| Fiscal Balance (% of GDP) | -5.1 | -3.4 | -3.4 | -3.0 | -3.0 |
| Public Debt (% of GDP) | 93.6 | 89.2 | 86.7 | 86.6 | 87.7 |
| Private Consumption (ann. var. %) | 4.6 | 5.3 | 0.6 | 1.6 | 1.4 |
| Industrial Production (ann. var. %) | 9.0 | 1.9 | -1.7 | -3.0 | 1.7 |
| Unemployment (% of active population, aop) | 7.7 | 6.7 | 6.6 | 6.4 | 6.3 |
| Policy Interest Rate (%, eop) | 0.00 | 2.50 | 4.50 | 3.15 | 2.15 |
| Money (ann. var. of M2 %) | 7.0 | 3.6 | -0.8 | 3.2 | 3.1 |
| International Reserves (USD bn) | 1,197 | 1,188 | 1,268 | 1,449 | 2,087 |